Inner Mongolia Tianmu Group invests in beef production
Better known as a dairy and ice-cream player, the Inner Mongolia Tianmu Group has signed the deal with the local government of Ulanqab city and the Chahaer region of Inner Mongolia with the cattle to be bred in 500 to 1,000 head feedlots which will be supervised by the company. The “standardised” feedlots are part of a “demonstration park” being set up by local government and will be centred around the Shang Hei Gou township.
Having already invested significantly in milk and ice-cream, Tianmu has been investing significantly in high-end beef production. It is targeting urban Chinese consumers with packaged “ecological” beef. A range of products on display at a recent Tianmu conference for investors and customers’ included fresh and pre-cooked steaks. While the company uses Chinese slogans like “organic” and “ecological” it has not secured official Chinese organic standards.
As part of this focus, Tianmu has launched a range of convenience-themed and highly packaged beef which is being marketed at families. ‘Meng Rong’ range of frozen, packaged steaks and cubed beef meanwhile includes the 160gram box of pre-cooked steak for RMB62.9 while a colourfully packaged ‘Children’s steak’ costs RMB39.9 for a 140 gram portion. A 1000 gram box of fatty beef cubes meanwhile retails for RMB138 under the Meng Rong range.
Government in Inner Mongolia has been keen to pull in investment for beef farming and processing as an economic driver for the region which by Chinese standards is lightly populated and home to grasslands. Speaking at the ‘Ulanqab City Agriculture and Livestock Husbandry Industrializsation Investment and Development Forum’ recently, Tianmu boss Liu Rui said his firm would create jobs and wealth with well-managed beef fattening facilities.
Branding will be key to Tianmu’s beef efforts, according to Liu. The company’s “brand awareness” and successful track record in dairy will be repeated in beef, promised Liu to the attendees at the forum. While the Tianmu Group was set up only in early 2014, the company’s ‘Snowy land’ ice cream brand won this year’s China Golden Spoon award for best ice cream.
Finance will be key to the Tianmu beef project in remote Inner Mongolia. Some of China’s best known banks and venture capital companies made the long trek from Beijing and Shanghai to the Ulanqab conference: among them Sequoia Capital, one of the country’s most successful venture capital firms. Food production has been one of the key targets of private capital seeking to invest in China but government control of land and lack of reform of land trading has been a stumbling block for some investors.
Tianmu has been grabbing headlines with public relations coups like a recent visit by noted American commodities investor, the Asia-based Jim Rogers, who signed a “co-operation agreement” with Tianmu while on a visit to the region. Tianmu general manager and chairman Liu Rui was also at hand recently when Tianmu sponsored the Inner Mongolia heats of the hugely popular 'China’s Best Voice' TV talent show. The sponsorship is part of Tianmu’s 2016 branding strategy, noted Liu in a media event to mark the sponsorship. Jim Rogers meanwhile expressed his confidence in Tianmu, in a statement printed in Mandarin pointing to rising Chinese prosperity and demand for proteins like beef.